"You have to look at the leasing market," says Robert Martin, senior managing director at Insignia/ESG, "and how rents went up by 30 to 40% in the last 12 months. Owners knew they were in an up cycle and decided it would be a good time to sell. There was a great demand for properties a year or so ago. And many who are not long-term players were looking at the shorter-term horizon." "Much of the property on the market is there because of the healthy economy and the high prices. And with the economy slowing, you have less buyers and cautious buyers. Sometimes it makes more sense to keep a property and get the return they want," Martin continues. "As for trophy properties, this is a historic time. I don't recall this many prime class A properties on the market. People are still buying, but just being more cautious."

"I would suspect that as there is greater volatility in the financial markets, it would have to cast some pall on our market," says Bob Freedman, vice chairman of GVA Williams. "The investment sales market is a function of supply and demand and it's a function of access to capital markets. However, the investment sales market does not always corrolate to the office leasing market, although they are quite consistent."

"What we are finding right now is the marketplace is normalizing. You are going to see very good prices obtained. They are not going to be 'silly' prices but prices that will reflect the dynamics of this market, which are still very positive. You will find some constraints on supply and we will see less product come to market," Freedman predicts. "That will exert positive effect on the investment sales market because we won't be awash in investment sales product." As for the trophy buildings, Freedman has this to say: "I don't believe we will have a radical pricing revision, but there will be an effect."

"People are pretty confident that the market is firm and is going to stay there," says Timothy Welch, executive managing director of Cushman & Wakefield. "But the growth rate isn't going to be imposed on longer term projections. What that does is take a little bit of steam out of pricing. If you set your pricing three or four months ago and you are starting to get bids today incorporating what has happened in terms of leasing and sub-leasing, the pricing won't meet your expectations."

"If you own something, you focus on how good it is. Sometimes, the owners don't come around to the fact that the market doesn't support their point of view." Welch concludes, "It is still a good market and if you have run the course on how you want to own the property, it is still a good time to sell."

Instant Insights /

Building Sales Market Reflects Strength, Not Economic Fear: Experts

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